Management control is a powerful tool that allows you to enter into the folds of the balance, extract data and divide them into subsections that, read individually, allow you to understand the real trend of your company. For example, if a company that produces “automotive spare parts” has differents segments and in particular:
it could decide to analyse each single segment called “COST CENTER” and verify their single trend as to the general accounting. The aim of this exercice is to identify the dead branches of the company and bring to light in a scientific way where to intervene with the scalpel to increase the productivity of a cost center that maybe right now is not very productive.
A careful control allows you besides to understand if it is the case to drop a company segment or to invest it to develop it. To do this, our software analysIs direct/indirect cost and how the revenues are moving. The main control phases are 4:
Crossing the data of the cost centers with the balance indicators allows you to have in your hand really the company, without having to the help of external consultants. The most important indicator "Z-Score" also called "indicator of insolvency" is the same indicator using the banking system to analyse the probability of a company DEFAULT and, proportionalluy to that, grant a loan. This indicator is the result of studies of eminent economists in the field of SME and it is a valuable tool to self-analyze before taking strategic decisions or plan investments.
We can therefore say that:
THE MANAGEMENT CONTROL IS A PROCESS
Consisting in
Necessary condition
HAVING ADEQUATE INFORMATIVE SYSTEMS
THE MANAGEMENT CONTROL IS TO VERIFY A COMPANY
or
Having a set of operational tools allowing to verify constantly the “ “REAL DIRECTION”
Control as
“GOVERNMENT – GUIDE” and not as “CHECK – INSPECTION”
